Cutting Recurring Costs to Save Money

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Recurring monthly costs can add up quickly and before know it, they’re already affecting your personal finance big time. They can chip in to your income, leaving you with less to squirrel away for a rainy day!

Just by taking a look at your recurring monthly expenses and learning where to make cuts can lead to you saving a significant amount of money over the year!

Let’s start by looking at some examples of recurring costs, and ways to lower them:

Cell/mobile phone contracts: Are you on the best tariff for your usage or are you paying for more features than you’re using? Some phone companies will offer you a review of your contract, simply call them up to check. If you’re not using all of your minutes and calls, you might be able to switch to a lower monthly package.

Gym memberships: If you’re not getting your money’s worth at the gym, cancel your membership and start playing sports like softball for exercise. Rather than a recurring fee, you have a one time investment for equipment. There are plenty of free apps and MP3s available to help you get up and active, and you’ll save the hefty monthly gym membership fee!

Entertainment: Do you pay for Sky, cable TV or a DVD rental service (such as Netflix, PushPlay, Blockbuster, etc?) Do you spend a lot on the Cinema, visiting the theatre or going to gigs each month? Review how much you’re spending on entertainment per month and decide if cutbacks can be made. Perhaps limit your entertainment budget and opt for cheaper activities instead.

Eating out: Eating meals out, ordering takeaways and buying lunch on the go will take a chunk out of your monthly income. Track just how much you’re spending on food alongside your weekly grocery shop and you’ll be surprised! Certainly think about making cutbacks – it’ll be better for your health too!

Groceries: Do you find yourself taking additional trips to the supermarket midweek to ‘top up’ your weekly shop? If so, keep track of how much you’re spending and look at ways to cut down – the easiest way is by planning meals ahead, cooking in bulk and then freezing additional meals for another week.

Internet: Are you with the cheapest provider on the best tariff for your internet usage? It might even be worth checking out if you’re eligible for any loyalty discounts too.

Miscellaneous subscriptions: Sift through your bank statements to check for old subscriptions you’re paying, which you’ve forgotten about! These can sneak up on the best of us! Everything from old mobile phone insurance contracts to recurring bank account charges, software subscriptions, magazine subscriptions and hobby websites we’ve joined! Check your account and cancel any payment that’s now redundant.

A few bonus tips for making savings…

Set a monthly budget and STICK TO IT: If you’re trying to cut down on unnecessary costs, set a monthly budget and stick to it. This will stop you being tempted to splurge the money you’re setting aside for financial savings.

Don’t be scared to borrow: If you need to take out a loan to cover an emergency payment, don’t beat yourself up about it. Think about what type of loan is best for your needs. If you only need to bridge a gap until payday and are confident you can pay the money back, a short term loan (for example, from Wonga Canada) can often be better than a more long term loan, even though the interest seems higher, you can actually end up paying less.

Don’t get suckered in by deals: Be wary of signing up for any deal or offer because it looks too good to be true. Often it is! For example, ‘buy one get one half price’ deals mean you’ll spend extra on buying a ‘bargain’ second item, but ask yourself “do I really need it?”

Extra reading: Learn how cutting taxes and refinancing mortgages and can help you save a great amount of money by keeping yourself informed and updated on any new reforms and tips.

That is true and is why I really should start budgeting. When you see the total spending on paper it makes a lot more impact than seeing the amount come out of your bank account each month. Having to record that number in your budget is a constant reminder that you might be wasting money.

Cutting recurring costs can be a fun, challenging game. I keep track of all my outgoing expenses and try to constantly track down better deals for the ongoing monthly costs. At times, all it takes is one phone call to a company. At other times, switching to a different company and becoming a new client can get you a great deal.

I’m trying to do better in that area too. I’ve been good with breakfast and dinner, but lunches are another story. Finally I’ve been bringing lunches to work but we’ll see how long it lasts with so many good lunch options close to work.

I like to prize myself by eating out with the family at times. I pre-plan by purchasing great Groupon deals and looking for coupons/discounts. That way, I can still enjoy the occasional meal out of the house and spend half the money I would otherwise.

You’re right that it doesn’t matter so much how you budget, it’s more that you actually do it. Once you start becoming more accountable to what you spend money on, you might just guilt yourself into giving up some of those wasteful expenses.

You’re lucky that you can put your gym membership on hold. I always hear about people stuck in long term contracts when they decide they don’t need it anymore. I should probably cut my cable channels a bit, but I’ve grown to accustomed to the luxury of getting all my sports on HD.

Gym memberships are quite a trap, unless you can really commit yourself to the long-term contract. I was lucky to find a gym that charges me per month at a very fair rate. It’s slightly more expensive than the per month cost of a yearly plan, but very worth the difference.

I saved hundreds last year from this, especially by cutting away my cable television and using online streaming instead. At times, the evaluations and cuts can save a lot of money in the short run as well. That’s when it feels like a more exciting game. 🙂

I hate all the bundling that cable/satellite companies do. Why can’t I just get the channels I want? If I can get 500 channels for $50/month, why I can’t I get the 25 I actually watch for $2.50? But the only option below what I have is what Comcast calls “basic” cable, which is really not cable at all, but the over-the-air networks delivered by cable.

I really hate that too. To get the 5-6 channels I watch, I have to pay for dozens others that I don’t need. I guess it’s a smart business move for them, but boy does it suck for the people who are paying for it.

Interesting concept. Or you just share it for free if they don’t password protect it 🙂
Personally I don’t know if I could handle sharing internet like that since it would slow down a fair bit having to go through walls.

There are liability problems with this as well. Last year, there was a guy who was arrested for downloading child pornography, but it turned out it was the neighbor who was mooching off the unsecured wifi connection

I cut out cable a few years ago, cancelled my gym membership and have been working actively to cut my restaurant spending. Every penny literally does make a difference when you have aggressive financial goals!

Nice work. I wish I could cut my cable and use that money somewhere more productive, but I’m rather hooked on my sports. Until they offer that online on a quality feed, I feel like I’m stuck paying for cable. I can at least cut back on my food spending though.

Nice job! I too cut my cable and actually sold my television since I wasn’t getting any use for it. Streaming is good enough for me and I have come to prefer it over the television. I negotiated down my internet costs, so my costs for entertainment went down from $50 a month to $2!

Cutting recurring costs actually gets quite exciting for me. I used to think of them on a monthly basis when they were small, now I think of how much I save on an annual basis, and it really makes the work worthwhile!

I should probably write down how much I spend annually on all the recurring bills. That is bound to light a fire under my ass to try to reduce those expenses. I’m sure there are ways I can save on all of those things.

You should! It was a great way to get my wife excited by the changes too. She had trouble getting motivated to make small changes in the recurring bills until she could see how the results worked in our favor in the longer term!

Recurring costs are the enemy! I hate all bills that I have that come monthly. Since graduating and lifestyle inflation starting to occur over the last few years I have had to be especially vigilant to not let any recurring fee oh its only 9.95/month go and then realize 5 years later I just spent $600 on something useless!

Those smaller ones can be especially dangerous since they are easier to overlook. I don’t think I have too many recurring bills, but there is probably a lot of stuff that I spend money on each and every month without thinking twice.

Being vigilant and organized is key. I constantly hear people complain that they are paying a monthly recurring bill on their credit card for a service that they either cancelled or are not sure what it is exactly. The cost was small enough to not bother doing something about it. But those few monthly dollars add up..

It’s all those little costs that drive the budget and really can put a dent in it. One thing is that people can easily be swayed into big, better, modern up to date technology ie: cell phones which all adds up. I always negotiate with the cable company each year to reduce the cost of our services.

Negotiating each year is a good strategy. I’m going to have to do that with my cable/internet soon. I was on a 12 month promo. So it might be time to put it under my girlfriend’s name to get a ‘new customer’ deal. In the long run, those recurring bills can add up to a lot more than the bigger purchases that people do take the time to shop around for.

It’s a great idea. There are websites (depending on your region/country) that compare the different kinds of deals available, so it’s easier to evaluate where to switch over. Prices tend to be so much better for new customers.

I’ve been guilty of that in the past….always going to concerts, sporting events, bars, etc. These days I’m all about the cheaper stuff. Once you get out of the habit of needing to spend a bunch of money every time you go out, you’ll find all kinds of cheap entertainment.

Cutting recurring costs are great, but if you can reduce the payment to them then that’s also a win. I cut my gym membership down from $40/month to $20/month this year and I’ve also saved $30/month on my cell phone plan.

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Joshua Rodriguez is the owner and founder of CNA Finance.
He is also a partner here at Modest Money. His analysis has been featured on Investing.com, Yahoo! Finance, Google Finance, Google News, and many others.